- Introduction to Company Culture
- The Ins and Outs of Company Culture
- Thoughtfully Design Your Culture
- Hiring and Culture Change
- Resisting Groupthink and Conflicting Cultures
- Why You Need to Implement Strong Company Culture
- The Dark Side of Company Culture
The days of drudgery, oppressive uniformity and limited expression in the workplace are coming to an end. Companies are beginning to realize that fostering open, unique environments may actually be highly beneficial, if not necessary. Organizations that emphasize clearly defined cultures that are aligned with company values enjoy better performance, greater financial gain and long-term employee commitment.
Aided by intense competition, companies that began to create unique cultures found that they were able to attract high level talent and better fulfill their employees' needs. Often involving customer or employee oriented approaches to business, rather than the self-serving systems of the past, company culture has become serious business.
Company culture is:
- A framework for your entire business
- What makes your company different
- Clearly defined and polarized
- Both visible and invisible
- Guided by company and employee values
- Built from the top down
Company culture is NOT:
- Vague platitudes or maxims
One way to think about company culture is as an operating system or framework for your company. It is the medium through which you and your company operate. All aspects of business (including the workplace itself) are either determined, or influenced by company culture. Because of its nature as a "soft" or less than soft concept, it has left many with misunderstandings and over generalizations. Company culture is not simply a set of vague, overused words or concepts. Real company culture revolves around meaningful categories and components. Dan Shapiro explains that the rule of company culture is: "It's what makes your company different, not what makes it great." Culture doesn't have to be directly tied to increased goals, necessarily; it can be oriented toward a unique environment.
Culture needs clear direction in order to be significant. It is impossible to strike a perfect balance between two distinct and opposing perspectives, further showing the importance of clear company values. Beyond making culture work for you, clear professional goals will determine the development of your company. You can't always do everything, and making hard decisions that determine your future is still going to have to be a part of your job. Clearly situated, definitive approaches are responsible for creating strong company culture. As a manufacturing company, for instance, deciding between creating fewer/more expensive high quality products versus creating greater numbers of lower quality products is still important. In order for company culture to really work, it needs to take stances on important issues. Without direction, culture is a foggy set of cliche platitudes.
Culture is both visible and invisible; some cues and concepts can be readily seen, while others are more elusive. Attire, for instance, is a visual aspect that can set the tone of the office. Casual clothing might convey a comfortable, laid back environment while formal wear might indicate expected attitudes about behavior. Similarly, even office layout and environment transmit company values. A highly modern office with glass walls and plenty of white boards presents an open environment that may be more conducive to collaboration than say, a warehouse that is sparsely decorated with hodgepodge. One is not necessarily better than the other, but they certainly embody different values. Mostly, company culture is intangible, though its visible components can't be overlooked.
Beyond taking clear stances on big issues, encouraging unique events will create an invaluable work experience. Some refer to such activities as "quirks." These are typically harmless and interesting activities that contribute to culture and are specific to a company. This could mean building kites on Fridays or encouraging employees to dress like cowboys. It should be something fun that reflects the interests of those involved and ideally, results naturally. Company quirks that differentiate your work environment from others will establish it as a unique place of employment. Creating special distinctions will make team members feel more connected as part of a group, boost morale and make people happier to be at work.
- Dan Shapiro retaliates against fuzzy conceptions of company culture that are seemingly everywhere. In Your Company Culture is a Meaningless Platitude, he refutes claims like "We work hard, but value work/life balance." He goes on to explain what a meaningful company culture looks like and what it can do.
- WePay started out as another small company trying to make it in Silicon Valley. They had not actively considered their company culture early on because it didn't seem necessary; they had just a few employees. As they began to grow, they realized that having a strong culture was important to the type of company they would be. Rich Aberman relives the early days of WePay through this anecdote presented the company blog. This story demonstrates the sorts of cultural questions asked of businesses and shows some of the possible ways of responding.
- In an article titled Advanced Entrepreneurship: Your Every Move, Your Culture Stever Robbins, "The Get-it-Done Guy," discusses the role of the CEO in shaping culture. Visible and invisible culture must be addressed by those at the top. Robbins also considers preferable ways to handle compensation and mistake management.
Employee mentality and personality strongly influence company culture. Your company culture is dependent upon the way your employees feel, think and work. It exists naturally as a product of the workplace. This doesn't mean that you are stuck with whatever environment emerges. There are many things you can do as a manager to thoughtfully design and shape culture. Designing your organizational culture in definite, strategically relevant ways is an effective means of pursuing your business objectives.
Create a Clear Point of View for Day-to-Day Operations
In order to do this, it is important to make the cultural values you wish to follow made clear. There will always be some disconnect between what you want to see as company culture and what actually is (publicized culture versus actual culture). Considering the difference between the current culture and the culture you wish to foster will help you see what needs to change. Matching company values with concrete practices or behaviors make concepts of culture more fathomable. Before people in the company can act out those values, they must be fully aware of what they are. Once this connection is made simple, the shared values of the organization will guide the work. Processes and workplace activities will be determined by core values.
Creating a robust cultural environment requires that those involved have some similar values. Everyday aspects of business will influence culture and perspectives in the workplace. A staff that genuinely believes in the core values of the company is likely to be committed to the work. Attacking culture from the top down is also important to its success. Those in leadership positions need to display and promote company values in order for them to stick. Why would a company continue to promote values its leaders don't care about? Make sure that the activities of low-level and high-level employees alike match the culture you are trying to foster. Conversely, make an effort to weed out and discourage behaviors and activities that are contrary to your desired environment. If you need to, don't be afraid to show off how important company culture is to you.
- Jason Young, a former senior manager of Southwest Airlines, discusses the link between strong company culture and achieving high performance in "High Performance and Company Culture." He provides a concise outline of concerns related to handling culture as a manager.
- Michael Griffin and Tracy Davis Bradley argue for the value of creating an organizational culture of open and honest communication through an article on Businessweek titled "Organizational Culture: An Overlooked Internal Risk." They explain that ignoring culture is not an option. Encouraging an environment of acceptance is necessary in dealing with problems as they occur.
- A transcript of the podcast titled "Culture Eats Strategy for Breakfast" that expounds upon issues pertaining to mismatched strategy and culture. Angelo Kinicki, a W.P. Carey management Professor at Arizona State University, warns of applying strategies that don't match organizational culture. In cases where this occurs, it is difficult to efficiently meet performance goals or enact change.
When hiring, emphasizing specific personality traits is essential in forming the sort of culture you want to maintain. This is one of the best ways to ensure that newcomers will contribute to and thrive in your desired company culture. By appointing a few key individuals in influential positions, it may be easier to attain the sort of change you are looking for. When the New York Times completely overhauled their company structure and culture in the 90s, they hired a new thirty-something head of planning. Though there were plenty of well-qualified and established prospects, the choice for hiring this new head of planning was grounded in culture. Compared to other prospects, Denise Warren represented the new model they were going for. Her values matched those most important to change and success in the company.
The rise of Facebook can be partially attributed to their approach to fostering a strong company culture. Even though the company grew from 10 million users to 250 million users in just three years, they continued to practice polarized decision making. Their hiring process, for instance, settled for only the absolute best. Not just the best that was interviewed, the best overall. Yishan Wong, an ex-engineering manager at Facebook says, "Make hiring your number one priority, always." In effect, this means carrying out the hiring process with urgency; contacting prospects immediately, following-up as soon as possible and giving interviewing priority over other work. Not only is this important for providing a competitive advantage, it actively drives other values and behaviors that are beneficial to the workplace.
It is much easier to establish core values early on than it is to totally revamp your approach. Intrinsic motivators such as having a meaningful position (that allows for growth) or an enjoyable work environment are typically more important to employees than extrinsic factors such as pay. An employee will be much happier working in a place that they enjoy and feel valued in rather than earning more at a job they hate (well, in most cases anyway). Though other factors still figure in the equation, it's hard to motivate anyone to break their back over wages that don't pay the bills. Emphasizing intrinsic factors will more likely to result in long-term commitment and growth.
Even though hiring new members can be a great way to shape company culture, you can't just hire an entirely new workforce every time you want to change it up. It requires maintenance and processes that encourage and reward adherence.
- Yishan Wong's account of culture at Facebook provides insight into what it was like working at Facebook, and the practices that differentiated them from other companies. Wong attempts to illustrate the aspects of business that are less often addressed by Silicon Valley maxims. Perspectives towards hiring, process implementation, and promotion policy are explained.
- Anthony Tjan, CEO and Founder of Cue Ball, gives four lessons on culture through Zappos CEO Tony Hsieh. Especially well-known for its highly unique approach to creating culture, the reason behind Zappos values and processes are given.
- An authority on company culture, John Kotter explains how large scale change is possible through approaches that are rooted in cultural change. Part of a series of blog posts dedicated to culture and its functions, this entry shows how culture is necessary for realizing lasting changes.
It is important to create an environment where workers share values, but it is still necessary to resist total uniformity. In balancing shared values and embracing an innovative environment, you must avoid the dreaded phenomenon known as groupthink. Irving Janis, the founder of the concept, explained that it is "a mode of thinking that people engage in when they are deeply involved in a cohesive ingroup, when the members’ strivings for unanimity override their motivation to realistically appraise alternative courses of action." In other words, people who share deep-rooted values and are in consistent contact with one another will choose actions and behaviors that avoid conflict. They will also overlook logical solutions to problems faced, in order to remain on good terms.
Groupthink is the death of innovation. When there is no diversity in thoughts or opinions, you risk creating a stagnant environment. Though a stagnant environment is sure to operate more consistently, you should take measures to prevent over stagnation that will limit company output. Ron Ashkenas, a managing partner of Schaffer Consulting, argues against overly kind or conflict avoiding cultures. Regarding these types of environments he says, "this avoidance creates disconnects between business units, unnecessary revisions in project plans, and lower standards of performance." Beyond limiting innovation, such an environment will lower performance. If people are unable to challenge their orders or ask the tough questions they need to, the environment will be flat and unproductive. Criticism should have a place in the work environment, as long as it is harnessed properly.
Producing an environment that holds multiple conflicting cultures is something you need to consider. While you definitely want to avoid an entirely unanimous group, it is equally important to prevent splinter cultures from manifesting. A lack of communication between teams may result in an "us versus them" mentality that perpetuates diverse interests. These diverse interests will result in diverse behaviors and values in turn. If leaders reinforce company-wide cohesion and remind employees that they are all working together, it will be easier to avoid a full-on civil war.
Chris Kuenne, co-founder and chief executive of Rosetta promotes active co-creation and collaboration across teams and departments. He believes that harmony does not equal homogeneity. A complementary culture will avoid groupthink as well as conflict. Kuenne writes, "More difficult - but more rewarding - is to create a harmonized culture with the emphasis on being complementary, rather than striving for conformity." Inherent in different positions are individuals with specific sub-cultures; what drives them, how they act, what they like and so on. Taking advantage of these differences will result in optimal workplace conditions. An environment that accepts and has room for many different types of people will prevent groupthink. It is important to remember, though, that there must be some balance between individuality and group cohesion.
- "Helping Your Staff Avoid Groupthink"- Allbusiness hosts this article that explains what groupthink is and how to avoid contracting the detrimental office virus. Some simple guidelines on how to encourage a culture of difference, create an anonymous feedback channel and keep conflict healthy are provided.
- "Group Therapy" – Alix Stewart of CFO.com explains the benefits of an environment that challenges ideas. Dissent and diversity can be the route to creative solutions and enhanced performance.
- A study titled "Cultural Conflict and Merger Failure" examines cultural conflict in work environments. Though it emphasizes problems related to merging, it also deals with those associated with cultural disagreements. Findings from the study show that performance is negatively influenced by contrary beliefs as well as perspectives regarding members of opposing cultures.
- The Harvard Business Review blog hosts Ron Ashkenas' "Is Your Culture Too Nice?," which elucidates common issues that result from conflict avoiding environments. Without a critical discussion, it is much more difficult for companies to identify and resolve important problems.
- Chris Kuenne's discussion of establishing a groupthink free environment, "Harmonize, Don't Homogenize," details why cross-team collaboration is necessary. He explains that his approach to company culture is "a little like taking the captain of the football team, the president of the student council, and the head of the chess club and asking them to work together." Making sure that separate entities operate together is important in maintaining harmony.
Encouraging a strong and focused company culture results in happy employees and greater financial gain. As a company, your culture represents your goals and purpose. Priorities in your business model will be evident in company culture.
A unique culture results in an environment that is difficult to reproduce, giving it an edge over other businesses you are competing against. Just because something works for you, doesn't mean that it will work for them. By operating under different principles and processes, you are making it difficult for competitors to match you. In the early 2000s, Toyota's production system was top-of-the-line. Widely envied, companies quickly began to copy their approach. What informed the system, however, was not simply their technology, it was their company philosophy. Known as "The Toyota Way," this approach to business demands high employee involvement at all levels. The entire workforce is responsible for suggesting and implementing changes. Emphasizing continuous improvement and a respect for people, the company culture is really the source of their success. Though competitors could replicate the formal means of production, they couldn't copy the culture of Toyota. The distinct values of the company distinguished it from others. Systems that rely on individual problem solving and consistent involvement from members at all levels can result in more effective production.
Strong company culture is responsible for strong outcomes. Veteran startup mentor Martin Zwilling explains, "Leaders drive values, values drive behavior, behavior drives culture, and culture drives performance." Led by values and behavior, employees will match the goals of the company. An emphatic culture enforces strong involvement and long term commitment. Methods of fostering such environments are wide ranging and sometimes extreme. Zappos, one of the most high profile culture-centric companies, offers new employees decently sized chunks of cash to quit after their first weeks. Such practices are aimed at limiting staff to those who are genuinely interested. Unconventional culture can work hand in hand with innovation to realize higher performance.
Ultimately, strong company culture allows for a number of advantages that have the potential to distinguish your business from your competitors. Such an environment will attract talent and improve employee retention and team cohesion.
- The authors of "Leading by Leveraging Culture" examine the power of organizational culture in this detailed explanation that is made available by the Harvard Business School. Culture strongly informs behavior and attitude and as a leader it is important to utilize culture in order to execute your strategy.
- Dr. Jeffrey Liker, professor of industrial engineering at the University of Michigan, published a book that examines the culture behind Toyota. Titled, "The 14 Principles of the Toyota Way: An Executive Summary of the Culture Behind TPS," chapter 4 in the book details the underlying culture and how it has contributed to Toyota's business practices.
If applied appropriately, culture can be a great thing for a company. Culture is not always positive, though; it can also be used for evil. When unethical or irresponsible values guide culture the results can be ugly. The scandal surrounding News Corp., for instance, is the product of unethical culture based practices. Being highly involved in the formation of News Corps.' culture, Rupert Murdoch set the company precedent. Intermittently calling members of the press "wankers" for asking annoying questions and otherwise exhibiting rude and extreme behavior, Murdoch has gained quite the reputation. Embroiled in a scandal over one of his (now ex) tabloids, News of the World, his company is believed to have regularly hacked the phones of citizens, celebrities, and even the British Royal Family to gain information. Illegally accessing phones in order to reach voicemail that contained sensitive information, the company emphasized an "any means necessary" approach. Along with innumerable breaches of privacy, those involved face charges of police bribery and obstruction. The cultural disregard of standards present in Murdoch's news outlets results in poor policy and unethical approaches to journalism.
The phone hacking crisis reveals the extent to which culture motivates and encourages behavior. It wasn't entirely Murdoch's fault, nor was it the fault of any specific individual in the company, but it was the company wide culture that influenced corruption on so many levels. Carl Bernstein asserts, "Reporters and editors do not routinely break the law, bribe policemen, wiretap, and generally conduct themselves like thugs unless it is a matter of recognized and understood policy." The actions of the involved parties were systematic and driven by Murdoch's relaxed approach to ethical and societal standards. Influence and mentality from top members of an organization determine behavior.
Other concerns that arise from Rupert Murdoch's management style and culture include dubious political activities. Many claim that he utilizes media as a lobbying device and personal mouthpiece. Such behavior begs questions of the role that responsibility and accountability have in culture. To what extent should responsibility be considered in designing cultures?
- Pulitzer Prize winner Carl Bernstein reports on Murdoch's Watergate at The Daily Beast. He demystifies Murdoch Culture and the excessively aggressive tactics it promotes. Bernstein's experienced journalistic point of view allows for considerable insight into exactly why and how this approach to journalism and company culture is so appalling.
- Neil Smith looks at responsibility and ethics in the corporate world through his article, "Is There a Culture of Secrecy Behind Corporate Responsibility." He examines factors that correlate with unethical practices and points to a few key case studies.
- The Guardian investigates the Phone Hacking Crisis surrounding Murdoch's News of the World and its basis in cultural ideology. The "whatever it takes" approach of his news operations are seen as the source of the extreme measures taken by employees to gain an advantage over the competition.
- The People and Projects podcast offers this interview, titled "Corporate Culture Survival," with the renowned Dr. Ed Schein. Delving into strategy and organizational culture conflict, Schein offers expert advice on understanding the workplace.
- How A Defined Corporate Culture Helps Your Business and Clients – Ellen LaNicca Albanese illustrates the ways in which clear, defined corporate culture helps communications company-wide. In this video interview conducted by Mike Bako, Albanese provides insight into possible approaches to creating a defined culture. CRT/Tanaka's award winning campaign for Bissel is used as a case study for understanding culture. Guided by the question "What can be?" CRT/Tanaka encourages employees to fulfill their goals.
- MIT and the Sloan School of Management host Ricardo Semler, president of Semco, in the Dean's Innovative Leader Series of lectures. In a speech titled "Leading by Omission," Semler reveals his practices that influenced company culture resulting in 900% growth over 10 years. Greatly challenging traditional models of business and the workplace environment, he strongly believes in democratic participation and humanity-based approaches.
- JetBlue: Organizational Culture and Values – David Neeleman, the CEO of JetBlue details his culture oriented approach to business through this lecture at Stanford. Cleanly separated by topic, 23 sub-sections address different concerns. Looking at business from a customer oriented perspective, Neeleman makes it clear that looking out for people is a priority.
- Five Archetypes of Organization Culture – Andy Friere, Co-founder and CEO of Axialent, immerses viewers in the world of organizational culture. This lecture primarily explains the major categories of corporate culture (customer-focused, one-team, innovation, achievement, and people-first) found in the workplace. The nuts and bolts behind culture are also addressed, though. Leadership's role in formulating and shaping culture for instance, are expounded upon. He explains the bottom-line is that unique cultures result in stronger performance and more consistent operations.
- Corporate Culture and Performance is one of the most influential works in understanding organizational culture. A collaboration between John Kotter and James Heskett, the book examines the corporate cultures of 200 companies and their financial results. This field changing discussion of culture and its beneficial effects forced businesses to realize the power of a strong culture. The authors found that long-term economic performance highly correlates with specific workplace environments. The findings suggest that the most successful companies, "highly value employees, customers, and owners" and "encourage leadership from everyone in the firm."
- Walking the Talk: Building a Culture for Success – Carolyn Taylor's Walking the Talk interrogates culture and expounds upon the discipline of its design. The text describes what is needed to plan and successfully implement a strong organizational culture.
- The Fifth Discipline - The author of this text, Dr. Peter Senge, is a senior lecturer at MIT who applies abstract theoretical concepts to practical tools for understanding change within companies. He has been named one of the 24 most influential actors on business strategy in the last 100 years. In The Fifth Discipline, he analyzes the challenges and successes of organizational learning through some high-profile case studies.
- Tribal Leadership – Dave Logan, John King and Halee Fischer-Wright contribute to this text that takes an in-depth look at corporate tribes. These entities are smaller groups of about 20-150 people that exist within a company and come together on their own. Using information from a 10 year study that included more than 24,000 people, the authors claim that tribes have significant influence over the amount and quality of work that gets done.
- The Corporate Survival Guide – One of the field's most prominent members, Dr. Ed Schein further adds to the discourse regarding culture and its place in the business world. Schein explores organizational culture beyond simply "the way we do things around here."
Is corporate culture a gimmick? How can you tell if visible aspects of culture are honest reflections, or simply fads?
Many fail to understand culture for what it really is. Leaders who are not in the know make attempts at culture that are superficial and have little impact. Culture is not something that you can just buy, it has to be built. Culture can be a gimmick, but implemented and followed through appropriately, it is an invaluable business tool. Geert Hofstede of Itim International states,
"Talking about a company’s culture has become a fad. To turn the concept into something of practical managerial use, we need to know how to assess a company’s culture in ways that permit realistic proposals for actions with some chance of moving the company in a desired direction."
How do happiness and culture interact?
Creating a culture that differentiates your business from others is important in gaining a competitive advantage and increasing performance, but what role does happiness play in company culture? In an interview with innovation expert Stephen Shapiro, Cathy Busani, the Managing Director of Happy Ltd. explains,
"If your people are performing their best, then your business cannot fail to perform at its best. And people perform their best when they are happy and feel good about themselves."
Others, such as Tony Hsieh and Jenn Lim of Zappos, believe that happiness is essential in fostering a productive culture. Some even say that they have begun a "happiness revolution" that is sure to change how culture is created in the workplace. In an interview with MSN's Business on Main, Hsieh advocates for happiness,
"There are plenty of studies that show a link between employee engagement and employee productivity. One of the best predictors of employee engagement is whether they have a best friend at work, or the number of friends that they have at work, which all goes back to one of the most important elements of happiness, according to the research: feeling socially connected."
How do I know if a company's culture is right for me?
The most important determinant of fitting in with a company culture is having the same values. Juxtaposing your needs and interests with a company's should help you see whether or not you are looking for the same things, and ultimately whether or not you will be a good fit. In a piece on the Washington Post, Randi Bussin Founder of the firm Aspire! states,
"The first step toward determining whether you will be a good match for a company is to know yourself and what matters most to you. You have to be clear about your needs. Are you seeking intellectual stimulation, a family-friendly environment, a social outlet or work-life balance?"
Bussin offers some helpful questions to ask:
- What three words or phrases would best describe the company/department culture?
- Does the company have a stated set of cultural values?
- Can you describe the environment here?
- What is the company’s attitude toward educational and professional development?
- What types of employee achievements are recognized?
- As a manager, how is it possible to assess something as intangible as culture?
So, once you've implemented all of the values you want to instill and hired your dream staff, how can you be sure that your organizational culture is strong? There are some tools and procedures that you can follow to assess culture. In some cases these are carried out by third party organizations, such as Kotter International or the Society for Organized Learning, though methods are often made available for self-assessment.
One available tool is the Organizational Culture Assessment Instrument (OCAI). It examines six dimensions of organizational culture that reveal how your organization operates and what values are behind it. The OCAI, is especially valuable for its ability to show where changes can be made. It is therefore helpful for developing and honing your organizational culture.
Others say that assessing culture is as easy as recognizing it. Chances are, if you or your employees aren't talking about it, it isn't important to your company.
What are some pitfalls of a strongly cultural approach?
As a leader, the values you proclaim will be subconsciously re-interpreted and slightly tweaked by employees. At some point in time, you may be viewed as acting inconsistently with company culture. This could lead to you being seen as "not walking the talk," undermining your image and leadership. Leading by Leveraging Culture describes one of the most undesirable pitfalls of a strongly cultural approach to business,
"Organization members perceive hypocrisy and replace their hard-won commitment with performance-threatening cynicism. Worse yet, because such negative interpersonal judgments are inherently threatening, employees say nothing publicly, precluding a fair test of their conclusions and disabling organizational learning from the event."